With the intensification of financial market turmoil in the fourth quarter of 2008 came a new round of distress to the U.S. economy, making this not only one of the longest but one of the most severe U.S. recessions since World War II. Real gross domestic product (GDP) declined at an annualized rate of 6.3 percent in the fourth quarter, the most in any quarter since 1982. As of March 2009, the downturn marked its 16th month, making it equal to the longest period of uninterrupted contraction in the U.S. economy since the 1930s.

While events in the U.S. and global financial markets are powerful drivers of the recession that began in 2007, this economic downturn is unfolding in unique ways across the various regional economies. For example, most areas of the country are experiencing housing market distress, but some are seeing more severe deterioration in local housing markets than indicated by national averages. One analysis shows that more than half of all residential foreclosure filings in 2008 took place in 35 U.S. counties where 20 percent of the U.S. population lives.1 Similarly, while some 41 states saw payroll jobs decline in 2008, the remaining 9 states (and the District of Columbia) continued to report employment growth.

The following series of articles takes a closer look at the distinct way that this recession is playing out in four major regions of the country. The first article describes how the latest downturn is exacerbating long-term problems in the manufacturing sector of the Industrial Midwest. In the second article, we explore how formerly booming housing markets in Arizona, California, Florida, and Nevada have given way to a housing bust that has sharply reversed the momentum of the regional economy. The third article focuses on the impact of financial market turmoil on New York City and other financial centers along the East Coast, while the fourth article outlines why a number of states in the nation's midsection have fared better than most thus far because of their high dependence on energy and agricultural production.

Richard A. Brown, Chief Economist

1 "Most foreclosures pack into a few counties," USAToday, March 6, 2009.